That news had fans and players, such as Sean Doolittle of the Washington Nationals, across social media asking why clubs were not active in free agency. As of publication, the two major stars of this year’s crop—Manny Machado and Bryce Harper—remain unsigned. In the total pool, of the 218 free agents, just 75 have signed contracts, with Patrick Corbin’s (six years) being the longest. That has led many to believe that owners are not investing in talent that would allow them to rise in the win column.

Economic data may provide additional fodder for that discussion.

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Last year, the league spent 54.2% of revenues on player compensation, the second-lowest amount dating back to 2010, according to industry sources who wish to remain anonymous. That compensation included not only the big-league salaries that fans have focused on but also players in Minor League Baseball, for which MLB pays. The 54% of total revenues was a drop of nearly 4% from 2017, based on data provided from sources. The last time that the percentage of player salary-to-revenues dropped more than that was in 2012, when the decline was over 6%. In a downward trend over several years, the last time that the percentage of player compensation compared with total revenue rose year-over-year was 2015 (up 4.2%).

The percentage of player compensation across Major League and Minor League Baseball compared with revenues.

Forbes Research

Fans and the media have focused on a decline in spending at just the major league level, and that, too, was significant. After being just over 50% of total revenues — which included the revenues from each of the 30 clubs at the local level, net income from MLB Advanced Media, MLB Network net income, centralized revenues and a portion of MLB Properties through distribution for 2016 and 2017 — there was an approximately 4% decline in spending on big-league talent in 2018. All told, the league's owners spent $4.5 billion on player salaries and other benefits for 2018. That was down $115.4 million compared with 2017.

The percentage of revenue that major league players have garnered as compensation compared with revenues has fluctuated between 48% and 52% for the last 15 years.

In terms of the percentage that MLB has doled out in player salaries compared with other leagues whose capped systems require a percentage of that sport’s related revenue to go back to the players as salary, the amount paid out—including benefits, etc.—is still the largest. In the NFL, the figure is 48.5%. For the NBA, it is approximately 50%.

According to one source, all-in-all earnings before interest, tax, depreciation and amortization (EBITA) for MLB was largely flat for 2018, but that doesn’t mean that there aren’t clubs that are highly profitable. As one industry insider said, “Clubs are allowed to make some money, right?” That is likely not to sit well with some, but in reality, no one invests in a business to constantly run in the red. Clubs such as the Miami Marlins won’t be profitable for some time.

In 2011, it was reported that nine of the 30 clubs in Major League Baseball were in violation of the league’s debt rule. The rule states that clubs may not carry debt 10 times more than annual earnings, a sign that owners are willing to put themselves into precarious financial positions to win.